An income alternative

VCTs offer a different asset class for investors clamouring for decent levels of predictable income. The benefit of recommending a generalist private equity VCT, in addition to the tax incentives, is the immediate diversification it gives a client. For income investors the benefit of a tax free dividend is clear; however it is the nature of their investment strategy that makes VCTs suitable as long term income vehicles. Private equity is traditionally viewed as a growth investment. Funds have to wait for corporate activity of the underlying investment to realise any significant return...